Ethanol exports fall to 9-month low in May

By Ann Lewis, RFA Research Analyst | July 07, 2016

U.S. ethanol exports totaled 55.7 million gallons in May, a considerable 42 percent or 40 million gallons drop from April, according to government data released and analyzed by the Renewable Fuels Association. Monthly ethanol exports have dipped lower only twice over the past two years. Canada received 21.5 million gallons of U.S. ethanol in May, displacing China as the top destination. Still, China was a close second, bringing in 19.6 million gallons of U.S. product. Together, the two countries accounted for three-fourths of all U.S. ethanol exports in May. Year-to-date ethanol exports reached 400.7 million gallons, meaning the industry is on pace to ship 962 million gallons in 2016.

May exports of U.S. denatured fuel ethanol fell 16 percent from the prior month to 31 million gallons. Most denatured product (19.4 million gallons, or 62 percent) crossed the border to Canada or was shipped to China (10 million gallons or 32 percent), with the remainder heading to Peru (1.7 million gallons). May exports of U.S. undenatured fuel ethanol sank 58 percent from April to 22 million gallons. Top customers were: China 9.7 million gallons, or 44 percent; Brazil: 6 million gallons or 27 percent; South Korea: 2.5 million gallons  or 11 percent; and Mexico, 1.7 million gqllonw, or 8 percent. Several regular export markets with large volumes in April (that is, India, the Philippines) were absent from the ledgers in May.

Sales of denatured ethanol for non-fuel use in May retracted to a fairly normal level of 2.2 million gallons after lunging to a near-term high in April. With Nigeria stepping back out of the marketplace, Canada captured nearly all of the volume at 2.1 million gallons. Sales of undenatured ethanol for non-fuel, non-beverage use was lower at 495,914 gallons. Mexico, South Korea and Taiwan together accounted for three-fourths of the total volume of undenatured industrial.

The first noticeable volumes of imports entered the United States in May, with 1.8 million gallons of undenatured ethanol coming from Guatemala and less than 20,000 gallons from the UK and France. Year-to-date fuel ethanol imports are just 1.9 million gallons, putting the U.S. on pace to import 4.6 million galllons in 2016.

U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—experienced sizable export growth in May with the third month-on-month increase. DDGS exports grew 20 percent to 1.06 million metric tons largely due to the doubling of export volumes to China over April levels. China imported 291,825 mmt of DDGS in May, or 27 percent of the total. Exports to Mexico increased as well with 158,702 mmt sold in May, while Turkey cut imports by a third to 105,584 mmt. The remaining half of the U.S. DDGS exports in May were spread across 29 countries, with the largest volumes moving to Vietnam (91,850 mmt), South Korea (55,019 mmt), Thailand (51,033 mmt) and Canada (42,521 mmt). Year-to-date DDGS exports of 4.4 million mmt indicate an annualized total of 10.6 million mmt.